HONG KONG - Markets rallied as forecast-busting Chinese data boosted hopes the world's number-two economy may be stabilising after an extended slowdown.
The news out of Beijing, which followed a recent batch of encouraging figures, came a day after authorities further eased restrictions on banks in a bid to kickstart growth.
The region-wide gains built on a surge in New York and Europe fuelled by healthy readings on the US consumer sector and indications from the European Central Bank that it may have reached the end of its interest rate hiking cycle.
The latest developments provided some much-needed relief to investors, who have endured a tough few weeks owing to concerns that a series of above-par economic figures will pressure the US Federal Reserve to lift borrowing costs once more this year.
Traders cheered after data showed Chinese retail sales and industrial production jumped more than expected last month.
The figures were the latest suggesting the economy could be stabilising, with inflation, trade and services all showing a marked improvement in recent weeks.
They also came a day after the People's Bank of China announced a cut in the amount of cash lenders must hold in reserve, a decision aimed at freeing up cash for loans that can juice business activity.
However, officials added a note of caution with the latest readings, with the National Bureau of Statistics warning "there are still a lot of uncertainties and instabilities externally, and the domestic demand still appears insufficient".
Hong Kong, Sydney, Singapore, Seoul, Taipei, Mumbai, Jakarta and Wellington were all well in positive territory. Shanghai, however, struggled to maintain momentum and ended slightly down.
Tokyo jumped more than one percent, helped by a rally in tech investor SoftBank that came after the firm's chip design unit Arm soared 25 percent on its trading debut in New York.
London, Paris and Frankfurt were sharply higher in the morning.
Traders were given a solid platform to start the day after all three main indexes on Wall Street rallied on the back of figures pointing to a still-resilient US consumer sector.
The readings, which came with in-line wholesale inflation data, suggest the economy could be headed for a soft landing as the Fed tries to take the steam out of and bring down inflation by hiking interest rates.
They also all but confirmed the Fed will likely not lift rates next week, and while there is still the possibility of one more hike this year, traders remain optimistic.